Evolution Gaming, a leading supplier in the iGaming industry, has reported a 1.5% drop in first-quarter net revenue, amounting to €513 million, citing declining channelisation rates across Europe as a key factor. Group CEO Martin Carlesund addressed analysts on Wednesday, highlighting the mixed regional performance with Europe underperforming. The company’s shift in focus towards the Americas reflects its strategy to counter these challenges and capitalize on growth opportunities in more promising markets.
The company’s analysis, based on customer IP addresses, indicated that approximately 48% of its Q1 revenue was derived from regulated markets. Carlesund noted that regulatory efforts in some European markets have failed to strike a balance between player protection and entertainment. As a result, players are increasingly turning to unregulated operators, a trend that is negatively impacting Evolution’s business and player safety. The CEO specifically identified the United Kingdom, Netherlands, and Sweden as regions with significant channelisation issues.
On the other hand, the Americas have shown robust growth, with Latin America and North America experiencing “great momentum” and “steady growth,” respectively. Carlesund reported that both regions achieved all-time high revenues, with North America’s growth rate in US dollars reaching approximately 21% year-on-year, up from 19% in the previous quarter. This expansion is partly driven by new game launches and strategic acquisitions, such as a developer in Argentina, positioning the company to leverage the early-stage potential in these markets.
The strategic pivot towards the Americas comes as Evolution re-evaluates its investment focus for 2026. Carlesund emphasized the company’s plan to increase investments in North and Latin America due to their high growth potential. Meanwhile, Africa has also seen positive developments, with new game offerings like Red Baron gaining popularity and the real-money gaming sector beginning to gain traction.
Despite the current challenges in Europe, Carlesund remains optimistic about the continent’s long-term prospects. He expressed confidence that regulatory adjustments would eventually bring players back to the regulated market, fostering a safer and more sustainable industry environment. Evolution had previously implemented ring-fencing measures across its European operations to ensure compliance, following an investigation by the UK Gambling Commission into its activities in the unregulated market. This initiative, however, has contributed to a reduction in overall profitability as the company navigates regulatory complexities.
Looking ahead, Evolution Gaming’s focus will continue to be on maximizing opportunities in the Americas while addressing European regulatory challenges. The company anticipates that ongoing market adjustments and regulatory developments will eventually stabilize and support its long-term growth objectives. As these factors unfold, Evolution remains poised to adapt its strategies to maintain competitiveness and regulatory compliance in the evolving global iGaming landscape.
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